When Comparing the Current Ratio to the Quick Ratio

question 4

Multiple Choice

When comparing the current ratio to the quick ratio:

• A)The current ratio will be greater or equal.
• B)The quick ratio will always be greater.
• C)The quick ratio is sometimes greater and sometimes less than the current ratio.
• D)They always will be the same.

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Definitions:

Stated Rate

The nominal interest rate specified in the contractual terms of a financial instrument such as a bond.

Market Rate

The prevailing interest rate available in the marketplace for securities, loans, and deposits.

A Discount

A reduction applied to the normal selling price of a product or service, typically used as a promotional strategy or to incentivize early payment.

Yield

The income return on an investment, such as the interest or dividends received, expressed as a percentage of the investment's cost.